An investigation of relationship about Global Strategy and competitive advantage; Case of HP
Abstract
The ever-going increase in competition has made it difficult for the companies to survive and increase their profit margins. As a result, it has become challenging for the companies sustain their competitive advantage. Consequently, many companies have started to adopt and implement new innovative and sustainable strategies. In this regard, studies highlighted that companies have started to enter different geographical markets to earn more profits.The overall aim of this study is to evaluate the relationship between globalizations strategy and competitive advantage, a case of HP. The results of the study are obtained using primary sources of information where data is collected from customers and employees. The study provided that globalization has number of benefits where companies can enter into different geographical regions through joint venture, wholly-owned subsidiaries and others. This allow companies to increase their efficiency, provide better products, come up with innovative products according to the demand and needs of the consumers in the new markets thus the company can achieve competitive advantage. The results of the study provided that there is a positive relationship between globalization and competitive advantage. Thus, the results of the study provided justification for all the research objectives and answers for research questions.
CHAPTER 1: INTRODUCTION
It is the age of competition. The competition is stiffening day by day due to many factors. It has become very difficult for companies to survive the competition. Companies and management need to be alert if they want to stay in the market. Daily, new technology is being introduced making the old technology obsolete. Some of the companies are also facing losses, as they are unable to sustain the competition. Recently, many companies have started to adopt new and innovative strategies. Companies have started to enter different and naïve geographical areas in order to earn more profits. According to Zou and Cavusgil (2002), there are many reasons why this strategy has been adopted.
Companies have adopted global strategy in order to survive the competition. As already mentioned above, the competition is intensifying. According to Yip (2001), it is very difficult for companies to remain competitive and retain market share. International and global expansion helps companies to remain competitive and increase the pie of the cake. There are numerous benefits associated with being global. By going global, the companies not only retain profits and market share but also acquire labor that is more skilled and enhance their efficiency.
Due to technology, the world has become a global village. According to Terpstra and Sarathy (2001), there is very difference left in developing and developed countries in terms of lifestyle. People from both developed as well as developing countries have adopted modern technology to ease their life. Usage of modern gadget and fast food gives evidence of the modern day lifestyle. People in third world countries have adopted such amenities only because the companies have gone global.
Consumers throughout the world use products from countries they have never even dreamt of visiting. This has become possible only due to global strategy of companies. According to Slywotzky and Hoban (2007), there are numerous benefits associated with global strategy. According to Porter (2011), companies primarily go global in order to beat the competition. When the local competition becomes hard to beat, the companies go to different geographical regions where there is lesser competition and better chance of survival.
Secondly, global strategy helps companies to increase their customer base. The total population in developing countries is increasing at a fast pace and they are all potential consumers. By adopting the global strategy, the companies acquire these potential consumers much before their competitor and earn profits.
By going global, the companies have better access to larger talent pool. According to Kling and Gofeman (2003), the labor in developing and growing countries has more skilled labor available at cheaper price. This give companies advantage not only in terms of cost but also in terms of skill. The companies gain value by getting skilled labor at cheaper price.
As the cost goes down, the profits soar. It is in the company interest to go global. By going global, the companies earn higher profit margins. The people in developing countries willingly pay higher prices for good since they believe that branded products have better quality.
Another advantage of global strategy is the increased efficiency. According to Kale and Singh (2009), by going global, companies earn economies of scale and economies of scope. When companies go global, their level of output increases and hence they earn economies of scale. The world biggest companies became big only after they went global. The companies practicing global strategy can have higher profit margins, offer low price high quality products and export products to the whole world.
Apart from the above mentioned, there are many reasons due to which the companies go global. By practicing global strategy, companies will have access to talent pool, which in turn would help companies to develop innovative and better product. According to Jagersma (2005), the skilled employees will give their ideas for making better products that would help companies to increase their market share.
Last but not least, companies may have first mover advantage if they are the first ones to go global. This can become a source of competitive advantage for them. According to Elmuti and Kathawala (2001), the source of competitive advantage shall be valuable, rare and costly to imitate. According to Fahy (2002), by going global, companies can increase the entry barriers that would be difficult for their competitors to break. This can become source of competitive advantage for companies.
Competitive advantage is more related to product development but since companies go global and acquire new technologies and new methods to produce, the question arise is whether global strategy chosen affects a company’s competitive advantage or not. Hence, this research would undertake the case of HP; since HP has expanded all over the world and its global strategies are extensive hence it would be appropriate to understand if HP gained competitive advantage due to any of its global strategy.
There are many reasons due to which this current study is being conducted. There are many gaps in the literature regarding the laptop industry. There is ample literature available on the global strategy and competitive advantage but very little research has been conducted on the computer industry. The researcher wants to conduct this current study to cover the gap in the research. The primary reason for selecting the given topic is that there are numerous benefits associated with global strategy.
The competition is increasing day by day and many companies are struggling to retain their market share. According to Campbell and Reuer (2001), there are many companies who have gone global in order to survive the competition. Some of the companies have adopted global strategy i.e. one aim and standard product for all areas and others have adopted adaptation strategy. According to Burdon, Chelliah, and Bhalla (2009), in adaptation strategy the companies offer localized products to the country of operations. This research is about global strategy so the discussion would be limited to global strategy only. Companies adopting global strategy adopt different entry modes to enter the different countries.
Initially, companies enter a new market through indirect distribution channel in which a local agent distributes the product. There are numerous other entry modes for going global too. The choice of entry mode depends on the circumstances in that company. Companies just don’t go global overnight. According to Byrne and Popoff (2008), in-depth research is conducted before entering into the market. This way the chances of failure reduces manifold. The global strategy of any company includes its tactics and strategies that it utilizes to take its company global. The companies in past have invested in different countries in order to gain advantage based on cost benefit, cheap labor, lower supply cost etc. These strategies seem to benefit organization in different aspects.
The case study of HP has been taken for this current research. HP is practicing global strategy for long now. The operations of HP are spread in more than 170 countries. The researcher wants to learn the main reasons due to which HP has gone global and the benefits HP is reaping out of it. HP went global in 1957 and since then it is the market leader in industry. HP is equipped with modern technology. It has the biggest technology portfolio that is helping HP to meet the needs of its consumers. The employees of HP comprise of the world most talented individuals who work on one goal i.e. to make a difference in the society (HP, 2013). Finally, the most important factor responsible for HP success is its strategies alliances with supplier. HP has promising partnerships with different industries and institutions all over the world. These partnerships are an asset for HP. The researcher wants to learn the other hidden factors responsible for HP competitive advantage in this research. The researcher wants to learn how the global strategy has become a source of competitive advantage for HP.
The main aim of this research is to effectively investigate the relationship between global strategy and competitive advantage. The aim of this research mainly focuses on the one company, which is HP, in order to analyze the relationship between global strategy and competitive advantage. Moreover, in order to accomplish the aim of this study, some objectives are developed that has been helpful to accomplish the aim of the research. The main objectives of the study are as follows;
- To analyze the existing theories of the global strategies and its association with the competitive advantage.
- To find out the global strategies that has been used by HP to operate in the international market.
- To investigate the impact of global strategies of HP on the company’s competitive advantage in the international market.
- To recommend HP about effective global strategies based on the gathered findings of the study in order to gain a sustainable competitive advantage in the international market.
The main research questions undertaken in this study are;
- What are the different types of global strategies that are used by the organizations?
- What are the main global strategies that have been used by HP?
- What role global strategies play in gaining the competitive advantage for the company in the international market?
This research is very significant for academicians as well as the stakeholders involved. The results of the study would be applicable to whole industry and thus everyone can benefit from it. This research would also be a meaningful addition to the past literature. It would open new doors for future research. There is very limited research on the relationship between global strategy and competitive advantage. Hence, these results would be valuable. The results of the current study would also be useful for the employees and management of the HP Company. It would help the top management to take necessary steps in order to gain competitive advantage in developing countries. Being a primary research, it would take into account the responses of real subjects. The weaknesses in the strategies of the HP would also be highlighted. The recommendations given at the end of the study would not only help HP but also other companies in the industry.
This research is divided into five main sections. Each section discusses different aspects of the research. The main sections of this research are i.e. introduction, literature review, research methodology, findings and conclusion. The introduction being the first chapter will lay down the foundation of the research. The introduction would give a brief intro about the research topic, the research objectives, the research questions and the significance of the study.
The literature review would lay down the theoretical foundation of the research. It would discuss the past literature related to competitive advantage and global strategy.
The third chapter would discuss the research method. The researcher would discuss the research design, research approach, sample and population and the ethical considerations required to conduct this research.
The fourth chapter would discuss the findings of the research. It would help the researcher to understand the responses generated from the respondents.
The last chapter i.e. conclusion would lay down the conclusion derived from the research. At the end, the researcher would give recommendations to HP to gain sustainable competitive advantage.
This chapter discusses the appropriate literature review about global strategy relation with competitive advantage. The researcher will lay down the relation between global strategy and competitive advantage. It will discuss how the global strategy can lead to competitive advantage and the different sources used for competitive advantage.
Zhou, Tse, and Li (2006) asserted that nowadays when there is an ever-increasing competition across businesses and within the markets it has become extremely important for large and small corporations to deliver value to customers. The main attention in today’s business and market conditions, is to provide their customers with products and services that are more valuable than the products and services of other competitors. Today, the marketplace has become extremely complex and turbulent. The aim at expanding the supply chain networks is to enhance the profits of the company along with customer response and improving the ability of the company to deliver value to its customers which in turn will enhance the collaboration and association among firms. Moreover, companies that expand from domestic market to global market increase their customer demands such as increase in the demand for lower prices, increase in delivery orders, higher quality products and services and increase in the product line and services.
Several studies during the 1960s-1990s reflected the traditional approach adopted by companies that first their operations in the domestic markets and then try to get a stronger position then after making a strong rand presence in the local market companies moved gradually to more distant markets. The process is rather slow but requires a lot of knowledge and research into the markets before the entering (Madsen et al, 2000)
According to Zhou, Li, Zhao, and Cai (2003), the current era is of globalization. The internet and modern technology has brought the world closer and it has become a global village. Everything is accessible at a mouse click. The globalization has also affected the traditional method of conducting business. The age-old tactics to conduct business are no longer viable. The globalization has opened new ways and techniques for business. Managers, companies, and researchers all have realized the importance of globalization. They have come to conclusion that the concept of globalization needs to be considered normal and must be taken into account while devising strategies. According to Zhou, Tse, and Li (2006), the success of organizations depends on their strategies in this competitive world. If the companies have efficient management that stays alert to the changing business environment and respond accordingly, then companies can succeed. On the other hand, companies have poor management will not be able to survive the competition in the long run. According to Harveston et al (2002), the results of the study highlighted that both old and new firms having global strategy possess strong globalization strategy. The findings of the study highlighted that competitiveness of global firms is better than the traditional firms having domestic scope only.
Moen (2002) carried out to study the reasons for why some companiesgo global within shot time while other companies remain in the local market mentioned that management perspective towards global strategy plays an important role. Larimo&Pulkkinen(2002) mentioned that management orientation towards global strategy affect the strategic objectives of the company.According to Zhou, and Peng (2006), in order to compete the competition in the current era, companies have no choice left but to go global. Successful companies are those who use global strategy as a technique to compete in the world market. There are plenty of definitions of global strategy. Global strategy is the technique through which the companies conduct their operation in times of tough competition in global market. With the help of properly devised global strategies, the companies compete with not only the local companies but at international level.
According to Rennie (2003), there is massive literature on the topic of competitiveness as well as competitive advantages. The discussion on competitive advantage revolve around three main important concepts including product or technology, price and marketing advantages. In contrast to this, Knight (1997) discussed that firms having global strategy and international market oriented companies have more advantage compare to companies that operate in the local market. The author further mentioned competitive firms can use their competitive advantage to build their position in international markets.
According to Young, Peng, Ahlstrom, Bruton, and Jiang (2008), a well-defined global strategy lays down the techniques and principle followed for day-to-day operation. It is important that when the global strategy is being devised, the management shall ensure to decide about the basis value chain activities. The value chain activities comprise of the day-to-day business activities. The business value chain is divided into two groups i.e. primary activities as well as secondary activities. According to Young, Ahlstrom, Bruton, and Chan (2001), Global strategy should decide on both primary and secondary activities. The primary activities include in bound logistics, operations, outbound logistics, marketing and sales and after sales activities. The supporting or secondary activities include procurement, human resource and technology. The management shall devise the global strategy in such a way that the whole value chain activities are integrated to give a competitive edge to the company. According to Yiu, Bruton, and Lu (2005), as global strategy about companies operation worldwide, it is of utmost importance that the global strategy shall predefined principles about the value chain so that the operations remain smooth.
Though each aspect of the global strategy is important, however the most important aspect is the marketing strategy being followed worldwide. The management shall give extra importance to the marketing strategy while devising the global strategy. According to Yeung (2006), the success of the company worldwide depends on the extent to which the marketing activities are coordinated worldwide. According to Xu, Pan, Wu, and Yim (2006), the main reason being that marketing is the only tool through which the company interacts with the customers. A well-designed marketing strategy would help companies to retain the market share in times of tough competition.
There is ample literature on the marketing strategies in the past literature. However, very limited literature is available on global strategy. The past literate contains very limited information about the global strategy. There is almost no literature on the reasons due to which the business adopts global marketing and the strategic implications of global strategy. The prior research on global strategy is very ambiguous. There is lot of gaps in the literature regarding the global strategy. The limited literature on global strategy opens new door for future research.
2.2. An overview of the global strategy literature
During the past decade, lot of authors and researchers has shown interest in global strategy. Many researchers have been conducted on global strategy but so far, the findings are ambiguous. There is lot of quality research required in this area. Different authors have given their perspective on global strategy. Many authors have even tried to recommend solutions to the global problems companies are facing. The number of solutions offered by authors implies that the global environment is very complex and requires in-depth information.
On one hand, the different perspective on global strategy has benefitted the organization to understand the complexity of the global environment but on the other hand, it has also created lot of confusion for the organizations. According to Wu, and Leung (2005), the world markets have become homogenous due to advent of technology. People have started to travel more often unlike the past for business, education and leisure. This increase in travel has opened the mind of the common person. People have started to understand the culture of the different countries and thus there is lesser confusion worldwide. This has helped organizations to go global. Marketers have realized that the needs and wants of the common person are almost same with minimal differences. These differences are only due to local taste and culture and they can be easily tackled with global strategy.
2.2.1 Global Strategy and its Association with Communication
According to Wright, Filatotchev, Hoskisson, and Peng (2005), the different communication tools and technologies have also made the world closer. People can stay connected with each other irrespective of the distance due to technologies. The products demanded worldwide are same and people have similar preference. The main of the global companies is to not only achieve economies of scale but also economies of scope. According to White (2000), Williamson (2000), due to global strategy, the output increases and thus the companies average cost reduces resulting in economies of scale.
Earlier many companies adapted to local culture when they entered new countries but they suffered losses. According to Wan, and Hoskisson (2003), with time, companies realized that the needs of the individuals are same and thus started to practice global strategy. Under global strategy, the company offers standardized products worldwide. Their marketing strategy and supply chain network is same in all countries of operations. This gives companies competitive advantage. Companies have become able to produce high quality goods at affordable prices. The major attribute of global consumers is that they would prefer low quality low priced good to high quality high priced goods. This gives the global companies an edge over competitors as they become able to product low price high quality good.
According to Wan (2005), companies can become successful and rich if they offer standard products throughout the world with single marketing strategy. The product and the marketing strategy shall be same irrespective of the location of the country. According to Uhlenbruck, and De Castro (2000), global strategy is not only about having standard product. According to Dunning (2004), there are many components of global strategy and offering standard product is only one aspect. A good global strategy has many others aspects like maximum output at minimum price. Companies practicing global strategy shall be pre-emptive i.e. should make regular larger investment and must have synergy between value chain activities. It is only then the global strategy can become successful. As per Dunning (2006), it is very important for organization to achieve a competitive advantage in all countries of operation in order to become successful and profitable.
Ethiraj, Kale, Krishnan, and Singh (2005), disagreed and suggested that global companies should not have single standard product rather they should have a huge portfolio of market offering. The global companies must have wide range of products to its customer. They must constantly do different investments and launch brands names to retain their consumers. They must constantly work on their supply chain network as well.
According to Teegen, Doh, and Vachani (2004), the success of the global strategy lies in the cross subsidization in market and products like and very strong supply network. Global companies should constantly indulge in offensive strategies to attack their competitors and at the same time be defensive against their act. In addition to that, the global strategies should also be flexible in their strategies as the market changes constantly. According to Tao (2006), the global companies must be alert to the changing business environment and take preventive measures to retain the share of the pie. The business world is very uncertain and it is important for global companies to ensure that their strategies must be flexible to adapt to the changing trend.
2.2.4 Global Supply Chain Strategy
Under successful global strategy, a company must have multiple suppliers to ensure timely supply. The number of suppliers should be optimal in number and both supplier and producer should work as partners to have a win win situation. Similarly, the companies shall also focus on cost reduction and profit maximization. According to Tallman, and Yip (2001), the company should take advantage from the stock market imbalances.
According to Spicer, McDermott, and Kogut (2000), in order to achieve competitive advantage, companies shall focus on strategic flexibility instead of strategic fit. There are two dimensions of the global strategy i.e. coordination between value chain activities throughout world and configuration of value added activities. It is essential that the global companies should focus on the value added activities in different countries to achieve competitive advantage. The firm and must have similar positioning strategy throughout the world.
On the other hand, Smith (2003), is of opinion that global companies shall focus on offering local products. The products shall be designed according to the local market conditions. Having localized products will lead to greater customer base in that particular country or area. In addition to that, the global strategy should be to adapt to local market conditions. Schuler, Rehbein, and Cramer (2002), suggested that localization advantages outweigh standardizations strategy. According to Singh (2007), the company efficiency increases manifold when it follows localized approach worldwide. The principle followed by the global companies should be to think global and act local. This is the prescription of success for global companies.
2.2.5 Five Dimensions of Global Strategy
According to Schlie, and Yip (2000), companies must be flexible in order to survive the international competition. There are five main dimensions that need to be considered by the companies while working in global market. The company should offer standard products to the consumers. Secondly, the global companies should concentrate on value adding activities to retain the customers. Third, the companies shall have uniform marketing strategy, fourth the companies should take integrated competitive moves and finally the company must participate in global market. By considering these five dimensions, the companies would become successful in global markets.
Companies practicing global strategy should put extra focus on the cost, government and market condition to retain the market share. By focusing on these factors, the companies would become successful in the end. Their performance would boost if they take into the five dimensions mentioned above and the factors mentioned.
There are many others as well that have studied the construct of global strategy. However, the conclusions generated so far are very limited and ambiguous. Each author has given a different conclusion. According to Hoskisson, Eden, Lau, and Wright (2000), there are four laws that help in understanding the global strategy. According to Ingram, and Silverman (2002), the first and the foremost suggest that the company must practice global strategy when the countries of its operations have similar culture or customer preferences i.e. they have business interdependencies. Secondly, the companies should identify the interdependencies sources. The source of interdependencies includes economies of scale, internationally recognized brand name and learning curve. The third law is that the companies’ business activities should be coordinated with each other. Fourthly, the global strategy must be aligned with the business strategy and each employee goal shall be aligned to organizational goals. By adopting these four laws, organizations can achieve competitive advantage.
In spite of all the research, there is still need for future research. The literature has lot of ambiguity that needs to be taken care of with more quality research. According to Isobe, Makino, and Montgomery (2000), the literature contains very limited information about the global strategy and the conditions when the global strategy is best suited. As mentioned above, there are numerous views about the global strategy i.e. supportive as well as contradictive.
There is very limited literature available on the ideal practices regarding global strategy. According to Peng (2002), there are two factors due to which the past research about global strategy is ambiguous. The first factor in this context is that most of the literature on global strategy revolves around industrial organization. As per the industrial organization context, the focus of the organization shall be on the external environment. According to Peng (2003), the external environment referred here means the porter five force analysis i.e. political, economic, social, legal and ecological. This implies that the global strategy depends on the external factors. If the external factors are in the favor of the global strategy, then the companies would benefits and global strategy would successful. Supportive external environment would also serve as the source of competitive advantage for companies.
2.2.6 Industrial Organizational Approach
The industrial organization approach has greatly contributed to the understanding of global strategy but it lacked the information and importance of internal factors. According to Hoskisson, Eden, Lau, and Wright (2000), the internal factors or the internal environment is equally important for the success of global strategy. For instance, if the external environment is supportive but the company does not have internal strengths, the company cannot successfully implement global strategy this way. Due to this lacking, the industrial organization approach is not a comprehensive approach in order to understand the global strategy.
The second factor is the resource-based view. Different authors have tried to explain the global strategy with the help of resource base view. As opposed to industrial organization view, the resource base view suggests that the main factors that affect the strategy of the organization are the internal factors. As per this view, the internal factors are the main driving force behind the global strategy. According to Peng (2004), there is ample literature on both views but none of the researcher so far has tried to study the both view together. There is strong need for researcher to study both the internal and external factors together in order to understand the global strategy. The researcher have studied different context of global strategies independently but there is no integrated view available so far. The next section briefly discuss the current theoretical approaches to global strategy in detail.
2.3. Current theoretical approaches to global strategy
2.3.1. The industrial organization-based theory
One of the main research questions of this study is to analyze the existing theories related to global strategies. Hence, the first approach to global strategy is called the industrial organization based theory. The previous section has briefly discussed this concept. The industrial organization based theory is similar to economic theory. For this approach, the structure conduct performance paradigm holds lot of significance. This suggests that the companies’ strategies are determined by its external environment. According to Peng (2004), the companies must evaluate its external environment before devising any strategy. The global strategy would succeed only if the external environment is supportive. It is very important for companies to study the external environment constantly in order to make changes to the global strategy. This will ensure long term success of the company.
Companies failing to evaluate the external environment suffer in the end. This approach is also called principle of co alignment. This means that there should be a fit between company business strategy and environment. The companies must explicitly evaluate the external environment and devise the strategy accordingly to have a win win situation.
For example; according to Peng (2006), there are two assumptions of industrial organization based theory. The first assumption is that the companies operating in one industry have same resourced and if a new entrant enters the market and has different resources as compared to others industries, this difference would be short lived. Due to these assumptions, the organization is considered as a black box having an economic purpose. According to Hofstede, Van Deusen, Mueller, Charles, and Business Goals Network (2002), it is very essential for organizations to adapt to the changing business environment in order to achieve success. According to Peng and Delios (2006), the strategic choices made by the company must be dependent on its external environment.
In the context of industrial organization mode, the companies can achieve competitive advantage through superior performance only since each company has similar resources. The products offered by the industry are homogeneous and undifferentiated. The only way through which the company can achieve competitive advantage is through superior performance. By performing superior, the companies can work on their product offerings and offer differentiated products to the consumers. The consumers will then be willing to pay high prices for their products and thus would earn competitive edge.
According to Peng and Luo (2000), the term strategy means the roadmap a company follows in response to the industry trend. The company can earn sustained competitive advantage through its strategy. Having a good global strategy is very important for companies to attain and retain the competitive advantage. For instance; when the company earns competitive advantage, they can restrict new entrants entry by creating entry barriers. The company can earn economies of scale and economies of scope that the other industry players would not be able to copy. The experience gained through economies of scale would help companies to develop a good strategy (Peng and Zhou, 2005).
According to Ramamurti (2004), there are certain pressures on companies while they operate globally. Some of the most important pressures for example include; entry barriers, product differentiation, and economies of scale problems, capital investments and buyer switching cost. Successful companies are those who respond to these pressures in the most appropriate manner. These companies devise flexible strategies to cater to these pressures. It is very important for companies to develop and implement such strategies that will help companies to succeed in the long run. Strategy is nothing but planning. Companies failing to plan, plan to fail in the end. Having a strategy is vital for company success.
The most important theories in the industrial organization perspective include transaction cost economics, neoclassical perfect competition, the Chicago tradition, the Schumpeterian view and the Bain type IO view. Each of these theories have only one aim i.e. To maximize the profit. This means the companies put special preference to the profit making. The company must only focus on the external environment in order to develop the business strategy. According to Ramaswamy, Li, and Petit (2004), focus on external environment will help companies to achieve success and improved performance in the long run. The gist of this discussion is that the external environment is very important for organizational strategy and profits. The internal environment and internal factors have not been highlighted in this approach.
This creates a gap in the literature. According to Ricart, Enright, Ghemawat, Hart, and Khanna (2004), the companies should only focus on the external environment in order to achieve competitive advantage. The strategies of the companies should also focus on the external environment. It is very important for organizations to develop global strategy that covers the external environment. The best global strategy is one, which is flexible to cater the external environment. In addition to that, the globalization drivers should also be incorporated in the global strategy. Global strategy has multiple dimensions that need to be looked by the organization in order to achieve success. The companies will perform positively if there is a strategic fit between company’s global strategy and industry globalization potential.
2.3.2. The resource-based theory
The second approach in order to explain the global strategy is the resource based theory. The resource-based theory is the opposite of the industrial organizational theory. Under this approach, unlike the industrial organization approach, the focus is on the internal strengths and internal environment of the organization. This approach suggests that the organizations shall focus on the internal strength in order to devise a successful strategy. Companies will achieve competitive advantage, if there is a strategic fit between organizational strengths and global strategy.
The internal forces of any organization shall be the driving force between the global strategies of the organization. According to Ring, Bigley, D’Aunno, and Khanna (2005), the company’s success of global strategy is not only dependents on the industry structure. The firm internal characteristics play a vital role here. For example all the successful organizations are those that develop strategies that best reflect their internal strengths. The resource base theory reflects how organizations can achieve competitive advantage in global strategy by focusing on internal strengths. The term resource is a very broad term. It only the firm information, knowledge, processes, learning curve, business structure and attributes, capabilities, strengths, assets, etc. each of these factors must be studied well before developing a global strategy in order to achieve competitive advantage. Firm’s efficiency and effectiveness can increase manifold if the business strengths are focused by the managers. Ti is very important for managers to capitalize on the strengths of the business.
There are three main categories of the business resources i.e. physical, organizational and human capital. Each of the resource has equal significance for the organizational success. While devising strategies, it is very important for organization to focus on the human and organizational capital. The physical capital is also very important but the other two are most important. The human capital means the employees. Having skilled employees can also help organization to achieve competitive advantage. There is a dearth of skilled employees these days. Having skilled employees help organizations to get an edge over competitors. Skilled employees need little guidance and are a good contributor to organizational goals.
Companies should have an idea about their critical resources. These critical resources can also serve as a source of competitive advantage. The critical sources include that are valuable to the company, are rare in nature and the competitors cannot copy them easily. According to Rugman and Verbeke (2004) there are two examples of resource base view for competitive advantage. The firms in one industry are different from each other and have different capabilities and secondly the differences may not last longer due to advent of technology. It is important for firms to capitalize on their strengths before the competitors copy them. The firms should keep their focus on hard to copy resources so that they can serve as a sustainable source of competitive advantage for companies in global operations.
Summary
The main of the study is to find out the relationship between globalization and the competitive advantage where the existing literature highlighted that due to increase in competition in the local markets, corporation have expanded from local market to other geographical regions which eventually will result in increasing the customer base, product and services, economies of scale and high profits and revenue. With the passage of time and due to increase in globalization, companies found out that the needs and demand of the consumers are the same across national borders due to convergence in taste and preference and cultural norms and values and therefore corporations adopted and implemented standardized global strategy that is they started offering products and services that are similar and homogenous across national borders. This implies that the marketing, production, distribution and supply chain strategies remain the same in all the countries where the company has its operations which further provides company with competitive advantage.
Global strategy allows companies to produce high quality products and services at lower prices due to economies of scale and scope therefore companies are better able to get competitive advantage due to standardized global strategy. The section further provided that there are two strategies that companies can adopt in order to globalize and gain a competitive strategy which may include industrial organization approach and resource-based approach where the section mentioned that under the industrial approach the company will first evaluate its external environmental prior to deciding on any business strategy as the strategy will succeed only and only if the external environment is supportive. In contrast to this, resource-based approach analyzed the internal strength and resources of the organization based on which strategies are devised which in turn will enable the company to achieve competitive advantage.
Finally, the available literature on the topic under study provided mixed results as at one point it highlighted that companies suffered losses as they entered new markets with local strategy rather than standardized strategy while other studies highlighted that strategy that is based on the local culture of the country works well. Thus, this reflected the gap in the present literature wherein this study attempts to provide conclusive results.
CHAPTER 3: RESEARCH METHODOLOGY
In order to effective execute the research work it is highly essential for any researcher to use a systematic and an appropriate process to successfully meet the set research objectives. In various books of research methods different tools and techniques are provided and discussed that are useful in carrying out the research work as well as in testing the developed hypotheses of the study to provide empirical evidences about the problem of the research (Babbie, 2010). It is identified that the chapter of research methodology plays a critical role in the research work as the accuracy of the results is greatly dependent on the designed research methodology of the study (Cohen, Manion, and Morrison, 2003). Blaxter, Hughes and Tight (2006) explained that the results of the study can be accurate or absolutely misleading depending on the methodology used by the researchers as the research methodology works as the guiding framework for the researcher.
Hence, in order to execute the current research work to investigate the relationship of global strategy and competitive advantage of HP, an appropriate tools and techniques needs to be selected to effectively gather the required data, which in turn meets the defined research objectives of this research.
It has been determined that Saunders, Lewis and Thornhill (2007) defined an elaborated process that enhances the understanding about the research methodology and helps the research to choose the most appropriate tools to conduct a research work. This process is basically recognized as the research onion process, which includes various research methodology elements such as; research philosophy, approach, strategy and methods of data collection. Hence, it is imperative for the researcher to have good understanding about the different tools and techniques of research methodology to choose the best ones as per the research problem and research objectives that helps in accomplishing the desired outcomes at the end of the research work (Goddard and Melville, 2004).
The first thing that research onion process highlights is the research philosophy, which is one of the most essential elements of the research methodology, as on the basis of research philosophy other elements of research methodology are selected to efficiently execute the research work (Babbie, 2010). It has been identified that the research philosophy is useful in exploring the effect of environment on the problem the study. Besides this, it is also found out that, the research philosophy not only influences the research work, but it also influences the researchers’ perspective. In addition, the research philosophy also helps the research to easily decide about the other elements of the research methodology (Johnson and Christensen, 2010). There are mainly three types of research philosophies, which includes; positivism philosophy, interpretivism philosophy and realism philosophy. All these three research philosophies are different from each and define the different ways to execute the study. The positivism philosophy is essential when the research problem needs to be addressed through empirical evidences as positivism philosophy is essential in collecting the required information in quantitative and the calculative form (McNabb, 2004).
In contrast to this, the interpretivism philosophy is appropriate, when the research problem needs to be addressed through interpreting social events and requires more of qualitative as well as secondary data than the primary and the quantitative data. Furthermore, the third type of research philosophy is realism philosophy, which is basically an amalgamation of both positivism and the interpretivism research philosophies (Caldwel, 2008).
Since, in this research to determine the relationship of the global strategy and the competitive advantage of HP, a positivism research philosophy seems to be appropriate, as it facilitates in collecting the required information to meet the objectives of the research effectively.The approach will assist the researcher to collect information from the representative sample including customers and employees which will then be analyzed to achieve justification for the research objectives. Ring, Bigley, D’Aunno, and Khanna (2005) executed the study related to global strategy based on the positivism philosophy and this is one of the major reasons behind choosing this philosophy for the study.
The second element defined in the research onion process is the research approach. Basically, there are two types of research approaches one is the inductive approach and the other is the deductive approach. The inductive research approach is also recognized as the bottom-up approach, as this approach allows using specific information in order to attain more generalized results. Besides, the inductive research approach is essential in developing the new theories (Jones, 2004). However, the deductive research approach which is also known as top down approach emphasizes on facts and figures to highlights the results of the study. Deductive approach is more useful in providing the empirical evidences through the testing of developed hypotheses. In addition, unlike inductive research approach the studies that are based on deductive approach highlight more specific outcomes rather than generalized results (Kumar, 2011). Hence, in the past he found out that to effectively investigate the relationship of the global strategy and the competitive advantage of HP, deductive research approach is more relevant because it provides the results that are based on facts and figures, which increases the validity of the research work (Rugman and Verbeke, 2004). The approach enable the researcher to develop research questions first then prior literature has been analyzed using extensive content analysis to gain understanding of the variables under study. Then, the data will be analyzed usingdifferent approaches and techniques to arrive specific findings.
3.5 Methods of Data Collection
To meet the defined objectives of the research, it is important to choose the best method of data collection, to gather the required information. There are mainly two methods of data collection, which are; a qualitative and quantitative method (Blaxter, Hughes and Tight, 2006). A qualitative method to collect the required data is useful, when the in-depth data or information is required in order to address the problem of the study and to meet the objectives of the research. Secondly, qualitative method is essential when the research variables are difficult to measure through calculative information (Murray, 2003). The major advantage of qualitative information is that it provides extensive information, which is useful in addressing the research problem more effectively. Nevertheless, the major drawback of qualitative method of data collection is that gathered information cannot be analyzed and interpreted through graphical or statistical techniques and can only be analyzed through content analysis. Therefore, the chances of biasness and the less validity of the research results are high (Kothari, 2008).
Conversely, the quantitative method is vital in acquiring the required information in more well thought-out way. In addition, the quantitative information is not easy to gather but it can also be analyzed and interpreted easily through utilizing various graphical illustrations and the statistical tools and techniques, which in turn enhances the validity of the research results (Blaxter, Hughes and Tight, 2006). Nonetheless, the major disadvantage of quantitative method of data collection is that it is not useful in gathering in depth information (Landy and Conte, 2009).
So, for this research to gather the required information, both qualitative and quantitative method of data collection is useful because, the methodologies used in the previous studies indicates that, to understand the relationship of global strategy and competitive advantage of HP, the in-depth information as well as facts and figures are required to validate the results of the research (Ramaswamy, Li, and Petit, 2004). The qualitative data will be used to develop the literature review section of the research study whereas the quantitative data is used to arrive the results and findings of this study.
The research strategy plays a critical role in the research work, as it helps in collecting the required information. There are different types of research strategies, including; experiment, survey, archival and others (Descombe, 2008). The research strategy needs to be selected effectively so that it helps in meeting the set objectives of the research as well as in addressing the problem of the study (Connaway and Powell, 2010). Therefore, on the basis of the problem and objective of this research survey research strategy looks to be appropriate to gather required information in an efficient manner. The survey method has proved to be a useful strategy in the past to analyze the relationship between global strategy and competitive advantage. Hence, based on the past research studies it seems that survey strategy is useful to collect the data from the respondents within less time and efforts. Using the survey method, the data for this research study will be gathered from the customers using close-ended questions whereas information from the employees can be gathered from open-ended questions.
To address the problem of the research and to meet the defined research aim and objectives, the sources that are used to gather the required information plays a vital role in the research (Wrenn, Sherwood and Ruddick, 2005). Usually, there are two kinds of sources that are used to collect the needed information and these are secondary source and the primary source.
The secondary source of information is useful in many ways, such as; it is essential in reviewing the existing research work that has been executed in the past in the related field of research. Moreover, the secondary source of information is also useful in determining the gaps in the past research studies, so that it can be overcome in the current research work (Connaway and Powell, 2010). On the other hand, the primary source of information is highly essential in collecting the first hand information about the problem of the study, which enhances the validity of the results of the research, because primary information provides current information (Drost, 2011).
For this research, both primary and secondary information are useful in order to successfully meet the research objectives. The primary information for this research is gathered from consumers is to determine about how well they consider HP as a brand as well from the employees of HP employees to know if their global strategies worked. The employees of HP are accessed through sending a formal permission letter for conducting the survey. On the other hand, the consumers are accessed randomly. Furthermore, the secondary sources of information are also useful for this study to extract about HP’s marketing strategies and other internal information related to its global moves. The secondary information can be used to develop the literature review section where the primary information can be used to gain justification for the research questions and objectives.
3.8 Instruments of Data Collection
To collect the primary information, it is important to use the most appropriate instrument. Since in this research a survey strategy has been chosen to collect the required primary information, however among survey strategy there are number of options available that are useful in gathering the required primary information such as; questionnaire, focus group, interviews and observation (Punch, 2003). Thus, for this research the questionnaire seems to be the most appropriate instrument to collect the required primary information, because, it is quite easy to collect information through questionnaire survey. Moreover, since this research requires collecting information both from the employees as well as consumers, therefore, two different questionnaires are used in this study. A questionnaire with close ended questions are used to collect primary information from the consumers, while an open ended questionnaire are used to gather required information from the employees of HP. The close ended questions are developed on five point Likert Scale in which 1 represents Strongly Disagree and 5 represents Strongly Agree. Both the questionnaires that are used in this research are self-explanatory and short. Moreover, the questions that are used in both the questionnaires are designed through reviewing the existing studies related to the subject of this research. The advantage of questionnaire is that it allows the researcher to gather data from the representative sample within less time and efforts. Moreover, the researchers in the past also illustrates that to attain the accurate findings of the study, questionnaire is one of the most effective instruments to gather the required primary information (Peng and Zhou, 2005), which is why questionnaire has been chosen for this research to collect the required primary information.
3.9 Sampling Technique and Sample Size
Sampling techniques is one of the most important parts of the research methodology as it helps the researcher to approach the suitable sample in order to collect the needed information. Therefore, for this research a non-probability sampling technique is used and under non-probability sampling the convenience sampling is useful to approach the pertinent sample for this research (Cochran, 2007). The major reason behind using convenience sampling for this research is that it facilitates to reach the respondents on the basis of their availability and convenience, which in turn saves the time and helps in completing the research work in due time (Levy and Lemeshow, 2011).
Moreover, the sample size of this research is based on total 200 respondents, out of which 150 respondents are the consumers of HP and the rest 50 respondents are the employees of HP. To collect the information from the 150 consumer respondents, the questionnaires are distributed personally to them through emails and face to face. On the other hand, the information from the employees of the HP is gathered through distributing the questionnaire personally by visiting the office of HP. The employee respondents include both male and female and the middle management employees only, while the consumer respondents include both male and female and who are of above 18 years of age. The chosen sample of this study is based on the sample size that has been used in the past studies. It has been analyzed through literature review, that most of the researchers have used the sample of 200-250 respondents to collect the primary information about the global strategy and its association with competitive advantage.
Since the gathered primary information of this research includes both qualitative and quantitative information, it is important to analyze and interpret the data carefully in order to provide accurate results of the research. The quantitative information is analyzed and interpreted through using graphical illustrations including; bar charts and pie charts, as well statistical techniques including regression and correlation analysis are also used to analyze the quantitative information through employing the software of SPSS. On the other hand, to analyze and interpret the qualitative information a thematic content analysis is used in this research, because qualitative information cannot be measured through statistical techniques. While doing a content analysis, all the gathered responses are transcribed into the word document and then all the important points are highlighted, which further compared with the responses of the other respondents to write down the overall response of the study. Furthermore, the qualitative and quantitative analysis of the data highlights the extent to which the set objectives of the research are met and also defines the research question answers.
In order to make sure that the results of the research are reliable, it is essential to check the reliability of the gathered primary data. Therefore, a reliability test is conducted for quantitative data which not only depicts that the gathered data is reliable, but it also indicates that the instrument used to collect the data is reliable and valid. The reliability and validity of the gathered is measured through measuring Cronbach alpha. The value of Cronbach alpha if appears higher than 0.7, it clearly indicates that the gathered data of the study is reliable and valid (Connaway and Powell, 2010).
To enhance the validity and the authenticity of the results of the research, it is essential for the research to meet all the ethical considerations required to successfully execute the research work (Malhotra and Birks, 2007). Therefore, while conducting this research work, it is ensured that all the ethical objectives are successfully met at each and every stage of research. Such as, while collecting the primary information from the respondents, they are assured that the provided information will not be used for any other purpose besides the academic purpose and also assured that the provided information will not be passing on to the third party without their consent. Lastly, while including the secondary information in the research, it is ensured that all the secondary information is properly cited to avoid plagiarism of others’ work.
Chapter Four: Results Presentation and Analysis
This chapter of the dissertation is based on the results, findings and outcome of the research study which will highlight the relationship between global strategy and competition advantage, a case of HP. Based on the research objectives and research questions of this particular study that are provided in the introduction chapter, the results and findings are obtained which are interpreted using as many charts, figures, tables and fine points as possible. As mentioned in the research methodology section, the data for this research is extracted from primary sources of information where data is collected using close-ended questionnaire and open-ended questionnaire. The results obtained from both sources is presented, analyzed and interpreted in a synchronized and organized manner. Creswell (2013) explained that the result section of a dissertation highlights the findings of the study which can be used to provide answers for the research questions and justification for the research objectives indicating the extent to which the research agrees, disagrees, or reject the problem under study.
4.2. The Purpose of the Result, Findings and Analysis Section
Usually, a research study which is carried out to address a problem under study comprises of five chapters in which the fourth chapter is the result and discussion section which presents the findings and results of the section along with the interpretations, accordingly where the results and findings are obtained by using different techniques and methods. The main objective for setting out the result and findings section is to find out the association between globalization strategy and competitive advantage, in case of HP which is analyzed using data collected from both customers as well as employees of HPwhere efforts made to get customers from different markets where HP has its presence. Briefly, the data from the customers is collected using self-developed questionnaire based on close-ended questions using Five point Likert scale, whereas the data from the employees is collected through open-ended questionnaire. Thus, the result section will provide the results that is obtained after carefully analyzing the data obtained from both customers and employees. The brief content analysis and statistical analysis will provide answers to the following questions:
- What are the different theories of global strategies and the benefits associated with each?
- What are the global strategies utilized by HP so far and what is the pattern of its global strategies?
- Has HP gained any competitive advantage in China, India and other developing nations when it acquired Global Standardization strategy?
- How can HP gain competitive advantage with its global strategies?
In this regard, Stephen Hinshaw, Chairman of the Psychology Department, University of California, Berkeley mentioned that result section is one of the critical section of a research study where the main aim to draft the overall section is to review the results obtained from this study reviewing back the literature review and then to create a link between the results of both the section. This is done in to justify whether there is a relationship between globalization strategy and competitive advantage of HP.
4.3. The Pre-writing Phase
Kumar (2010) and Bierman (2004) mentioned that the result and outcome section of the study is also referred to as the ‘brainstorming phase’ or ‘the Pre-writing Phase’ as it allows the researchers to ponder over the results of the study while looking at the literature review and the concepts highlighted by the previous authors, scholars and researchers in an attempt to justify the research objectives and questions of this study. For instance, in this particular study, the researcher will look at the results obtained from this study and will then compare it with that of the previous studies to highlight the strength and weakness of the recommendations made and to identify any gaps that exist in the previous literature. Based on the analysis, the final draft is made which will outline the results and findings of the study that can assist the researcher in outlining the recommendations and conclusion. This indicates that this section holds importance because the research can answer the discrepancies that are identified in the previous section as well as can provide recommendations to HP based on the results and findings of the study.
4.4. The Profile of the data
Based on the nature of this research study, the data for this dissertation is collected using both secondary and primary sources of information where the secondary information is used to develop the literature review section of this study while the primary sources are used to obtain the results and findings of this study. Using the primary sources of information, the data is collected from both employees and customers of HP. From customers, the data is collected using close-ended questionnaire; while, on the other hand, the data from employees is collected using open-ended questionnaire. The data obtained from customers is analyzed using statistical analysis while the data obtained from employees is analyzed using content analysis.
The sample size of this dissertation is based on total 200 respondents, out of which 150 respondents are the consumers of HP that reside in different markets such as China, India and otherswhereas 50 respondents are employees of HP. The data from the respondents is collectedthrough the questionnaires which is distributed personally. On the other hand, the information from the employees of HP is gathered by visiting the office of HP.
4.5. Findings of the Study
The section below provides the results for this study which is obtained by analysing the data obtained from both, customers and employees. The section below provides the results obtained from both questionnaires;
4.5. Findings of the Study
The section below provides the results for this study which is obtained by analysing the data obtained from both, customers and employees. The section below provides the results obtained from both questionnaires;
4.5.1 Findings Obtained from the Customers
The data which is obtained from 150 customers is entered into IBM SPSS software which is used to analyse the data obtained from the customers. The data is analysed using statistical analysis including descriptive statistics and frequency charts. The table below shows the reliability of the data obtained from the customers;
Table 1 Reliability of the Data
| Reliability Statistics | |
| Cronbach’s Alpha | N of Items |
| .790 | 12 |
As shown in the table 1, the reliability of the data is checked by conducting the Cronbach’s alpha reliability test which is done to evaluate the internal consistency of the results. The alpha value obtained is .790 which is greater than the benchmark value of .6 therefore it can be said that the results are consistent and the data can be used to get the desired results.
Figure 1 Age profile of the respondents
The figure 1 above shows the bar chart for the age profile of the respondents that took part in the survey. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 39.33% have ages between 21 and 25 years, followed by 26.67% of the respondents that have ages between 26 and 30 years, 28% of the respondents have ages 31 and above while the remaining respondents have ages between 18 and 20 years. The distribution of the age profile of the respondents highlighted that all the employees have ages more than 18 years while indicates that employees are mature enough to critically evaluate the relationship between globalization strategy and competitive advantage.
Figure 2 Gender of the respondents
The figure 2 above shows the bar chart for the gender of the respondents that took part in the survey. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 60% are female respondents while the remaining respondents (40%) are males. The distribution of the age profile of the respondents highlighted that the representative sample size comprises of both females and males and therefore has been able to gather opinions from diversified customer segments but since the distribution highlights that the number of female employees is much higher compare to male employees thus it can be said that it is likely that the results will be influenced by gender biasness as females are less informed about technology and related innovations.
Figure 3 HP offer products that are highly reliable
The figure 3 above shows the bar chart for the customers’ opinion about the reliability of HP products. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 36% agreed that HP offer products that are reliable; followed by 34% of the respondents that strongly agreed with the statement. 16% of the respondents disagreed that HP offers reliable products, 8% of the respondents strongly disagreed with the statement while the remaining 6% remained neutral due to their lack of information about HP products. Majority of the customers prefer HP due to high quality however those that do not prefer HP is because of their high preference for other brands such as Samsung and Apple that has taken the toll in laptop market. As stated in the literature review section of the study, Wright, Filatotchev, Hoskisson, and Peng (2005) mentioned different strategies adopted by the company enable people to stay connected due to technological advancement. The authors mentioned that people around the world demand same products and services as well as same features and characteristics and therefore companies can achieve competitive advantage by satisfying the customers’ demand and needs. One such feature is reliability of the product and services which is demanded by customers. The customers from different markets ranked HP as a reliable product which highlights the advantage the company has over other competitors (Peng and Zhou, 2005).
Figure 4 HP offer high quality products to the customers
The figure 4 above shows the bar chart for the customers’ opinion about the quality of the HP products. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 36% agreed that HP offer high quality products to their customers; followed by 34% of the respondents that strongly agreed with the statement. 16.67% of the respondents disagreed that HP offers high quality products, 8% of the respondents strongly disagreed with the statement while the remaining 5.33% remained neutral. As mentioned in the literature review section, Williamson (2000) stated that the global strategy allow companies to reduce waste, increase output and achieve economies of scale which in turn enhances the quality of the products and services and allow companies to gain competitive advantage in the market Responses from the employees of the company mentioned that HP has been able to reduce waste by integrating supply chain and distribution system. . Companies are unable to gain competitive advantage if they adopt customized strategy in global markets which results in additional costs and resources (Ramamurti, 2004).
Figure 5 HP always deliver orders on time
The figure 5 above shows the bar chart for the customers’ opinion about the delivery time taken by HP. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 36% agreed that HP always deliver its products on time which indicates company’s ability to provide better services to its customers; followed by 34% of the respondents that strongly agreed with the statement. 16.67% of the respondents disagreed that HP delivers products on time and most of them have experienced this in case of third party sales, 8% of the respondents strongly disagreed with the statement while the remaining 5.33% remained neutral. The distribution of the responses highlights that HP provide better services to its customers. This regard, this research study pointed out that there various benefits of adopting global strategy and one such strategy is benefit is integrated supply chain and distribution system which allows the company to deliver the products to customers on time at any part of the world as provided in the previous section. The existing literature review shed light, such as Yip (2001) asserted that going global allow companies to enhance their competitive advantage and thus their global market share in the industry.
Figure 6 HP caters customers need for ‘new’ features
The figure 6 above shows the bar chart for the customers’ opinion about the need for ‘new’ features in the products. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 32% agreed that HP always cater the customer’s needs for ‘new’ features; followed by 24% of the respondents that disagreed with the statement, similarly, 20% of the respondents strongly disagreed that HP provide innovative and new features to its customers while 21.33% of the respondents remained neutral. Zou and Cavusgil (2002) pointed out that recently a number of companies have implemented strategy to introduce new products and services as they enter different and new geographical areas in an attempt to earn more profits.It is critically evaluated that, HP is present in a number of global markets including China and India thus it enables the company to exploit the changing customer demands and needs resulting in the introduction of new products and features.
Figure 7 HP provides customized products to cater customers effectively
The figure 7 above shows the bar chart for the customers’ opinion about the ability of HP to provide customized products. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 32% agreed that HP provides products that cater customers effectively; followed by 24% of the respondents that disagreed with the statement, similarly, 20% of the respondents strongly disagreed that HP provides customized products while 21.33% of the respondents remained neutral. The distribution of the responses highlighted that HP is unable to cater the different demands and needs of customers including the need for innovative features. This highlights that the company seems to have adopted standardization of products and services acrossdifferent markets including China, India and others which enables the company to provide standard products rather than customize products and services. It is critically evaluated that if the company to use similar marketing elements, research and development and resources across different markets (Peng and Delios, 2006).
Figure 8 HP offer products that are very durable
The figure 8 above shows the bar chart for the customers’ opinion about the ability of HP to offer products that are durable. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 36% agreed that HP has been able to provide their customers with durable products; followed by 34.67% of the respondents strongly agreed with the statement, on the other hand, 16% of the respondents disagreed that HP provides durable products while 8% of the respondents strongly disagreed. The results highlights that customers prefer HP over other brands because of its durability. This aspects is common in the advertisement made by HP; for instance, HP Envy 15 portray the product as affordable, stylish and durable. Zou and Cavusgil (2002) explained that global strategy allow companies to satisfy the customer needs and demand which can be done by standardized products and services where HP provide customers with durable products and services to satisfy the demands of the customers and to increase profits.
Figure 9 HP has fast product development than its competitors
The figure 9 above shows the bar chart for the customers’ opinion about the ability of HP to develop new products than its competitors such as Samsung, Dell and Apple. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 32% agreed that HP has been able to develop products at a faster rate than other competitors; followed by 24% of the respondents disagreed with the statement, on the other hand, 20.67% of the respondents strongly disagreed that HP develops product faster than its competitors. Looking at the market trends, it can be seen that HP recently launched touch screen laptops where the same is provided by Toshiba, Samsung and Apple. Thus, it can be seen that although growth and development is slow at HP but development is there. Peng and Luo (2002) mentioned that companies can gain competitive advantage by developing products faster than their competitors. Looking at the growth in product development process, Apple and Samsung has gained tremendous popularity however HP has recently updated a new product development process, as shown below where the team does not stop the development process but engages in iterative experiments at one time;
Source: Takeuchi and Nonaka (2013)
In today’s competitive market conditions, flexibility, speed and product development are critical for the success of companies (Takeuchi and Nonaka, 2013).
Figure 10 HP introduces new products before competitors
The figure 9 above shows the bar chart for the customers’ opinion about the ability of HP to introduce new products in the market before competitors. As shown in the figure above, majority of the respondents that took part in the survey, i.e., 32.43% agreed that HP provides new technology and products in the market before any other competitors; followed by 21.62% of the respondents that strongly disagreed with the statement and 22.97% of the respondents disagreed that HP introduces new products before competitors. The results of this statement is in line with the previous statement which highlights that Samsung and Apple are known brands in the market for their new and innovative technology. Peng and Luo (2002) mentioned that companies can achieve better competitive advantage by offering new products and services which can be done by introducing new products that are better and faster than the competitors.
4.5.1 Findings Obtained from the Employees
The data is obtained from 50 employees of HP using open-ended questionnaire which is analysed using content analysis. The reliability of the qualitative data cannot be measured through Cronbach alpha because the gathered is in content form. Content analysis is technique used to analyse the text which is available in books, articles and other printed sources. The section below provides the results from the responses of employees;
- Is bringing low-carbon innovative products to market is a strategic decision of HP to enhance financial growth and respond to customer demand?
In response to this question, majority of the employees mentioned that carbon emission by the IT industry is just a small part of the overall puzzle, i.e., of all the carbon emissions in the world. The employees mentioned that the IT industry generates nearly 2 percent of the carbon emission and therefore HP attempts to mainly reduce that 2 percent as well as attempt to reduce the remaining 98 percent. Employees mentioned that implementation of energy-saving solutions can enable companies to reduce carbon emission in all the phases of their business. Further, employees mentioned the management is trying to reduce print management and print on-demand services that can save energy as well as paper that will allow the company to operate more efficiently. Out of fifty employees, most of the employees mentioned that introducing low-carbon products can be important for the growth of the company as time passes because as business grows introducing low-carbon products can become more significant. This statement from the employees highlighted that HP is in its growth phase where introducing products can become even more important to reach maturity.
In addition, the answer to this question highlights some of the groundwork which is laid by the management in an attempt to transit to low-carbon economy which includes “dematerialization” of data centers, implementation of a photonic interconnect to reduce the need for heat-producing, improving processing speed and lowering bandwidth costs. Most of the employees mentioned that this is done to ensure that the company operates efficiently and meet customer demand cost-effectively.
The employees further mentioned that introducing low-carbon products is less concerned with enhancing public relations through implementing environmental protection policies but is referred to as a strategic decision that can enhance the ability of the company to respond to increasing customers’ demand and financial prospects of the company.
- How HP is effectively balancing the current needs and future opportunities to gain a competitive advantage across the globe?
Majority of the employees mentioned that HP has always had a competency in long-term planning. The company’s ability to come up with marketing innovations such as Pavilion/ Wal-Mart collaboration highlight the long-term planning of the company to increase market share and customer base. The employees further highlighted that the company has stretch goals in areas like reducing carbon emissions and environmental impact which highlights the company’s willingness to achieve and retain leadership positions with strategies that have long-term perspective such policies and practices are also likely to have a strong impact on the brand perception of the company.Thus, by adopting corporate responsibility strategies and introducing innovative products the company is trying to maintain its “white hat” position in the industry.
Some of the employees clearly differentiated between the strategies adopted by the company in the short term as well as in the long term and how the company is balancing between the two. In the short-term, the company is looking forward to provide customers with innovative, durable and reliable products according to their demand and needs whereas in the long term the company is looking forward to enhance its strategic position in the market through investing in low carbon products which are likely to enhance financial growth of the company as well as increase profits. As a result, the company has been able to outperform its competitors in terms of growth, profitability, revenue and total return to shareholders; in addition, employees mentioned that it further enabled the company to maintain its market position in case of changes in leaders, business cycle and industry disruptions.
Based on the research topic, the respondents critically evaluated that enhancing competitive position through globalization elucidates the company’s attempts to reduce costs, effectively use resources and gain global market share which will enable the company to learn more about diverse customers’ needs and wants thus allowing HP to introduce better, flexible and high quality products in turn gaining competitive advantage (Peng, 2006).
- Do you believe that commitment, pride and trust are critical to long-term success and in gaining the competitive advantage in the market and does HP really understand the complexity of creating organizational trust and commitment for the stakeholders?
Majority of the employees believed that the three mentioned aspects of creating relationship is essential for gaining competitive advantage and the company has strong focus towards improving commitment, pride and trust for the long-term success. The employees highlighted some of the efforts made by the managementto ensure organizational trust and commitment with their key stakeholders includes increasing both labor and environmental standards through creating collaborations and alliances with suppliers, external auditors and capacity building; focusing on reducing the impact of business operations and supply chain network on the environmental by implementing practices that emits low-carbon and are environmental friendly; emphasizing on re-use and recycle of products; emphasizing on economic growth and environmental sustainability; employing highly diverse workforce and providing them with environmental and working conditions that are safe, healthy and supportive; designing products and packaging that can meet the customer demands and requirements.
In addition to this, the company’s ability to cater the growing demands of the customers through providing products that are durable, flexibility and innovative products. This has enabled the company to retain market share in such as competitive industry. Hence, it can be argued that, HP uses environmental management system that can reduce the environmental impacts while increasing the workplace and saving HP money.
- Do you have a plan for developing all the capabilities you need to deliver the services in your portfolio?
In response to this question, most of the employees mentioned that HP has a flexible portfolio that follows a high-performance business model that is unique in its own way and assists the business to deliver their services effectively and efficiently thus gaining competitive advantage. The employees mentioned that the company follows four strategies which assist in developing strategies and capabilities that allow the company to provide the best services in the global industry, bearing in view, the company has operations in different countries; Growth strategies which refers to business strategies and practices that are adopted to increase consolidatedbusiness revenue; Profitability strategies which refers to business strategies that are developed and implemented to increase the return on capitalwhich will be achieved by making better investment and strategic decisions; Positioning for the future which include strategies that are adopted to improve the share price of the business which implies adopting strategies that will increase the future value of the business; Consistency which indicates strategies that are adopted bearing in mind the expected profitability, growth and strategic position of the company in different markets; and finally, Longevity which refers to strategies that can calculate the amount of out-performance in terms of return to the shareholders of the company.
- Do you have a mission and vision that are well understood and effectively guide decisions throughout to gain the competitive advantage across the world?
In response to this question, the employees stated out that mission and vision statement assist companies at time of rapid development and increased competition. The mission and vision of the company are well-understood and therefore employees and management of the company knows that radical changes in the business practices, operating practices, cultural norms and values and business strategies does not mean going out from the spirit of the HP Way which is the core principle of the company. The mission, vision and strategic objectives of the company is to become the leader in the respective industry by introducing innovative and unique products that are in line with customers’ needs and wants as well as to develop better relationships with stakeholders that will contribute towards enhancing the competitive position of the company.
- What is the major global strategy that is currently being used by HP to deal with world’s most daunting challenges like increasing competition and rapidly changing needs and demands of the consumers?
In order to address the challenges related to increasing competition and rapidly changing needs and demands, the ‘global sustainability strategy’ adopted by the company which is focused at wining new business while maintain the old business in an attempt to increase the real revenue. In addition, under the sustainability strategy, the company attempts to look at expanding the distribution system across Europe and charging additional prices for their innovative products. Majority of employees provided that the company is looking forward to charge premium price for new products as well as to enter into new markets. Most of the employees shed light that HP’s sustainability strategy has already contributed in making the company a clear thought leader in the industry which has given it an advantage of the first-mover opportunities and first pick of top suppliers, employees and partners. The company retools its infrastructure and supply side strategies, it further aligns its operations and processes with emerging best practices, giving it a competitive edge as well as opening and new growth horizons.
Summary
The results of this section is obtained through questionnaire where two questionnaires were prepared, one with close ended questions with the aim to obtain responses from the customers while the other one was open-ended questionnaire which was directed to get responses from the employees that work in HP. The responses of the customers provided that HP is durable, reliable and provide high quality but the company lacks innovative features and is unable to cater the demand of its customers. On the other hand, the employees mentioned that the company’s long-term strategy is to launch product that are low-carbon intensive as well as to enter into new markets which is in accordance with the globalization strategy of HP
Chapter Five: Conclusion and Recommendation
This is the last chapter of the dissertation which aims at providing the concluding remarks and will wrap up the entire research study. This section comprises of the following sub-heading; summary of the research study which highlights the key points from all the sections; recommendations to the HP, suggestions for future research and conclusion. This section provides justification for all the research objectives as well as the research questions that are set out in the first chapter of the study.
5.2. Summary of the overall research study
The introduction chapter of the research study highlighted that competition is increasing day-by-day due to increase in globalization and rise in technology.The ever-going increase in competition has made it difficult for the companies to survive and increase their profit margins.Zou and Cavusgil (2002) explained that every day companies are introducing new technology in replace of the old technology. As a result, it has become challenging for the companies sustain their competitive advantage. Consequently, many companies have started to adopt and implement new innovative and sustainable strategies. In this regard, studies highlighted that companies have started to enter different geographical markets to earn more profits. Furthermore, companies have become global to survive increased competition. According to Yip (2001), expansion to global markets enable companies to retain their competitive position or to increase their market share. This research highlighted that there are number of benefits for going global which may include increase in profits and market share as well as to acquire cost effective labor, resources and efficiency.
Due to globalization, consumers have been able to get products that they have never used before. According to Slywotzky and Hoban (2007), globalization allow companies to beat competition, when, the domestic markets become extremely competitive then companies expand to different geographical regions to increase the chances of their survival. In addition to this, globalization allow companies to have better access to skilled labor and work force.Globalization allow companies to earn higher profit margins, introduce new and innovative products and to gain competitive advantage. This is due to the fact that people in developing countries such as India, China and others are willing to pay premium prices for products as they believe that branded products have better quality.
The main aim of this study is to examine the relationship between globalization strategies and competitive advantage that is to find out the extent to which globalization allow companies to gain competitive advantage in their markets by introducing new products in new markets.
The results and findings of this study is obtained using primary sources of information where the data is collected using structured and unstructuredsurvey method. The data for this study is obtained from both customers and employees where the information from customers is collected via close-ended questionnaire which is analyzed using statistical analysis; on the other hand, the data from employees is collected using open-ended questionnaire. The data gathered is analyzed using content analysis and descriptive analysis.The results and findings of the study are used to provide justification for the above mentioned research objectives which are as follows;
The results and findings of the study conclude that mainly there are two major theories related to global strategy that is industrial organization strategy and resource-based theory. The literature review provided that the strategy of the company is determined by the external environment. Peng (2004) asserted that global strategy adopted by the company would succeed if the external environment is supportive exhibiting positive forces. In addition to this, the management of the company should study the external environment continuously in order to make changes in the global strategy thus ensuring long term success. The second approach towards global strategy is resource based approach which is focused at the internal strengths and internal environment of the organization. Unlike, the previous theory to global strategy, this approach suggests that companies should focus on their internal strengths along with firm specific characteristicsin order to arrive at a successful strategy. This strategy will allow the company to gain competitive advantage by creating a link between strategic fit and internal strengths.
The results obtained from this research helps in answering one of the research questions, which highlights that HP when entered in China, India and other geographical markets adopted similar marketing strategy; for instance, HP printer ads for India and Kannada are the same which highlights the company’s strategy towards standardized marketing strategy across markets. In addition to this, the company has integrated supply chain and distribution system that enable the company to distribute HP computers, printers and tables in different markets thus further enhancing the accessibility of the products.
Furthermore, this research also concludes that the company adopted Globalization Standardization Strategy when entered in China, India and other markets which allowed the company to use available resources, marketing strategy and research and development. This enabled the company to reduce waste and enhance quality of the products and services improving the competitive advantage of the company. The study provided that HP has a competitive advantage among other brands in terms of its durability, reliability and high quality products, in addition, the company is known for its after sales services which further strengthen its market in developing countries. But, in terms of innovative products, Samsung and Apple has strong presence in the market.
The results and findings of the study provided some key aspects which include the following;
- HP is well-known among customers for its durability, reliability, high-quality as well as after sales service. In order to sustain it competitive advantage the company needs to invest more in research and development in order to come up with more innovate and high quality products.
- The company needs to constantly keep a check on its global strategies in order to meet the rapidly changing demands of the consumers of the global market and sustain its competitive advantage in the industry.
- Since the consumers are showing greater concerns for the environmental safety, it is suggested to HP to come up with low-carbon emission products, as it will enable the company to achieve competitive advantage in the market as well as the company can charge premium price for the product
- Globalization allows companies to increase their profit margins but at the same time it has increased the competition as well. Hence, it is recommended to HP, to outperform the competitors in the market and this is it is significant to enhance the company’s marketing strategies to attract large number of customers.
- Lastly, it is recommended to HP, to constantly gain feedback from the customers across the world in order to effectively serve the needs of the global customers and gain a sustainable competitive advantage in the global marketplace.
5.4. Suggestions for future research
The main objective of this study is to evaluate the relationship between globalizations strategy and competitive advantage where the results of the study provide that globalization allow companies to increase their efficiency, provide better products, come up with innovative products according to the demand and needs of the consumers in the new markets thus the company can achieve competitive advantage. In future the same study can be carried out but the methodology can be different. In addition, in future, research can be done to identify the impact of different market entry strategies adopted for globalization on the competitive advantage of the company.
The overall aim of this study is to evaluate the relationship between globalizations strategy and competitive advantage, a case of HP. Based on the above analysis, it is found that globalization has number of benefits where companies can enter into different geographical regions through joint venture, wholly-owned subsidiaries and others. This allow companies to increase their efficiency, provide better products, come up with innovative products according to the demand and needs of the consumers in the new markets thus the company can achieve competitive advantage. The results of the study provided that there is a positive relationship between globalization and competitive advantage. Thus, the results of the study provided justification for all the research objectives and answers for research questions.
The study faced a number of limitations. First, the study is conducted to evaluate the relationship between globalization strategies adopted by HP and its impact on the company’s competitive advantage thus the results of the study cannot be generalized and applied to other companies as they may adopt a different strategy to enter the market. In addition to this, the sample size is very small to consider appropriate. The sample size of the study is 150 which indicates that representative sample can represent the overall population. Finally, the results are done mainly to evaluate the HP competitive advantage in developing countries thus the results cannot be applied to developed countries which may have other brands and companies having significant market share.
Creswell, J. W. (2013) Research Design: Qualitative, Quantitative, and Mixed Methods Approaches3rd Edition. Los Angeles: Sage Publications, Inc.
Kumar, R. (2010) Research Methodology: A Step-by-Step Guide for Beginners 3rd edition, SAGE Publications Ltd
Babbie, E. R. (2010) The Practice of Social Research. Belmont CA: Cengage Learning
Blaxter, L. Hughes, C. and Tight, M, (2006) How to Research, 3rd Ed. McGraw-Hill International
Burdon S., Chelliah J., Bhalla A. (2009). Structuring enduring strategic alliances: the case of Shell Australia and Transfield Services, Journal of Business Strategy, 30(4), 42-51.
Byrne S., Popoff L. (2008). International Joint Ventures Handbook, Baker & McKenzie.
Caldwel, B. (2008) Positivist philosophy of Science and the Methodology of Economics, Journal of economic Issues, 14(1), 53-76
Campbell E., Reuer J.J. (2001), International Alliance Negotiations: Legal Issues for General Managers, Indiana University Kelley School of Business, Business Horizons Copyright.
Cochran, W.G. (2007) Sampling Techniques, 3rd Ed, India: Wiley Pvt Ltd
Cohen, L., Manion, L., and Morrison, K. (2003) Research Methods in Education, New York: Taylor and Francis
Connaway, L. S., and Powell, R. R. (2010) Basic Research Methods for Librarians, New York: ABC-CLIO
Descombe, M. (2008) The Good Research Guide. London: Open University Press
Drost, E. A. (2011) Validity and Reliability in Social Science research, Education Research and Perspectives, 38(1), 105-123
Elmuti D., Kathawala Y. (2001). An overview of strategic alliances, Management Decision 39/3 205-217, MCB University Press.
Fahy, J. (2002). A resource-based analysis of sustainable competitive advantage in a global environment. International Business Review, 11(1), 57-77.
Goddard, W. D., and Melville, S. (2004) Research Methodology: An Introduction, 2nd Ed, New York: Juta and Company
Harveston, P. & B. Kedia& P. Davis (2000) ‘Internationalization of born global and gradual globalizing firms: The impact of the manager’. Advances in Competitiveness Research 8(1), 92-99.
HP (2013), Data retrieved from www.hp.com
Jagersma P.K. (2005), Cross – border alliances: advice from the executive suite, Journal of Business Strategy,2(1), 41-50.
Johnson, B. and Christensen, L. (2010) Educational Research: Quantitative, Qualitative, and Mixed Approaches, 4th Ed. SAGE
Jones, A.L. (2004) Logic: Inductive and Deductive an Introduction to Scientific Method. Kessinger Publishing
Kale P, Singh H. (2009), Managing Strategic Alliances: What Do We Know Now, and Where Do We Go From Here?, Perspectives, Academy of Management.
Kling K., Gofeman I. (2003). Ikea CEO Anders Dahlving on international growth and Ikea’s unique corporate culture and brand identity, Academy of Management Executive.
Knight, G. (1997) Emerging paradigm for international marketing: the born global firm. PhD. Dissertation, Michigan State University, USA.
Kumar, R. (2011) Research Methodology. APH Publishing
Kothari, C.R. (2008) Research Methodology: Methods and Techniques, 2nd Ed, India: New Age International
Landy, F. and Conte, J. (2009) Work in the 21st Century: An Introduction to Industrial and Organizational Psychology. 3rd ed. John Wiley and Sons
Larimo, J. & J. Pulkkinen (2002) Competitive Advantages and Export Strategies: Empirical Evidence from Finnish SMEs. Presented in the 12th Nordic Conference on Small Business Research, May 2002, Finland.
Levy, P. S., and Lemeshow, S. (2011) Sampling of Populations: Methods and Applications. New York: John Wiley and Sons
Madsen, T.K., E.S. Rasmussen & P. Servais (2000) ‘Differences and Similarities between Born Globals and Other Types of Exporters’. Globalization, the Multinational Firm 10, 247–265.
Malhotra, N. and Birks, D. (2007) Marketing Research. Global Cork
McNabb, D.E. (2004) Research Methods for Political Science: Quantitative and Qualitative Approach. M.E. Sharpe
Moen, O. (2002) ‘The Born Globals: A new generation of small European exporters’. International Marketing Review 19(2), 156-175.
Murray, T. R. (2003) Blending Qualitative and Quantitative Research Methods in Theses and Dissertations, New York: Corwin Press
Porter, M. E. (2011). Competitive advantage of nations: creating and sustaining superior performance. Simon and Schuster.
Punch, K. (2003) Survey Research: The basics, New York: Sage Publishers
Rennie, M. (1993) ‘Global competitiveness: Born global’. McKinsey Quarterly 4, 45–52.
Saunders, M., Lewis, P. and Thornhill, A. (2007) Research Methods for Business Students, 4th Ed. London: Prentice Hall
Slywotzky A., Hoban Ch. (2007), Stop competing yourself to death: strategic collaboration among rivals, Journal of Business Strategy, 28(3), 45-55. Retrieved from http://www.emeraldinsight.com/journals.htm?articleid=1603609&show=html
Terpstra V., Sarathy R. (2001). International Marketing, 8th edn., Chicago Il, Dryden Press. Yip G. (2002). Total Global Strategy, London Prentice-Hall.
Wrenn, W.B., Sherwood, P. and Ruddick, M. (2005) The Marketing Research Guide, 2nd Ed. Routledge
Yip, G. S. (2001). Total global strategy. Prentice Hall PTR.
Zou G., Cavusgil S.T. (2002). The GMS: a broad conceptualization of global marketing strategy and its effect on firm performance, Journal of Marketing, 66, 40-57.
Appendix (Questionnaire)
Consumer Survey Questionnaire on Global Strategy and Competitive Advantage of HP
- Your Age:
- 18-20 years
- 21 – 25 years
- 26 – 30 years
- 31 years and above
- Your Gender
- Male
- Female
Given below are some statements relating to your organization. For each of the statements given below please specify your level of agreement or disagreement by putting a check mark in the
appropriate box
(Kindly Tick only one for each statement)
| Strongly Disagree | Disagree | Neither agree nor disagree | Agree | Strongly Agree | |
| 1. HP offer products that are highly reliable | |||||
| 2. HP offer high quality products to the customers | |||||
| 3. HP always deliver orders on time | |||||
| 4. HP cater to customer needs for “new” features in the products | |||||
| 5. HP provide customized products for to cater customers effectively | |||||
| 6. HP offer products that are very durable | |||||
| 7. HP has fast product development than its competitors | |||||
| 8. HP is first in the market in introducing the new products comparatively | |||||
| 9. HP offers diversified products for its customers than its competitors | |||||
| 10. HP has well established geographical presence than its competitors |
Thank You for Your Time and Resourceful Insight
Employee Survey Questionnaire on Global Strategy and Competitive Advantage of HP
- Is bringing low-carbon innovative products to market is a strategic decision of HP to enhance financial growth and respond to customer demand?
- How HP is effectively balancing the current needs and future opportunities to gain a competitive advantage across the globe?
- Do you believe that commitment, pride and trust are critical to long-term success and in gaining the competitive advantage in the market and does HP really understand the complexity of creating organizational trust and commitment for the stakeholders?
- Do you have a plan for developing all the capabilities you need to deliver the services in your portfolio?
- Do you have a mission and vision that are well understood and effectively guide decisions throughout to gain the competitive advantage across the world?
- What is the major global strategy that is currently being used by HP to deal with world’s most daunting challenges like increasing competition and rapidly changing needs and demands of the consumers?
Thank You for Your Time and Resourceful Insight
